Your SlideShare is downloading. ×
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

The Last Few Years Have Seen A Heavy Focus On Improving The Product Development Process In The Apparel Vertical

688

Published on

Published in: Business, Technology
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
688
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
49
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. The industry is focusing on Product Lifecycle Management
    • The last few years have seen a heavy focus on improving the product development process in the apparel vertical. This has been driven by:
      • Desire to improve gross margin through faster speed to market and greater responsiveness enabling more market “right” product
      • Need to gain better leverage on overhead costs through more efficient processes
      • Consolidation in the offshore sourcing end of the supply chain, catalyzed by the loosening of quotas
      • Entrance of new product development & PLM software vendors from other industries who now enable product development process and organizational transformations; these vendors are significant in size, dedicate large funding to R&D, and bring experience from other industries that have complicated products and global, multi-party supply networks
      • BUT now as fashion retail evolves, the REAL competitive advantage our clients seek through PLM is SPEED
  • 2. Speed has taken on a new meaning…
    • GREATER RESPONSIVENESS AND CYCLE TIME…
      • New process models
      • Strategic vendor partnerships
      • Geographical shifts in “where” activities are performed in supply chain
    FLEXIBILITY AND RESPONSIVENESS
    • GREATER VISIBILITY TO INFORMATION…
      • Collaborative Design and Development
      • Product Lifecycle Management tools (PLM)
      • Exception based management
    NEWNESS AND EXCLUSIVITY
    • “ FAST FASHION” BECOMING A “REQUIREMENT”..
      • More frequent product introductions
      • Greater perception of freshness
      • More innovation
    SPEED
    • GROWTH IN PRIVATE LABEL…
      • Consumer need for uniqueness
      • Retailers are competing with brands
      • Retailers becoming Value Chain leaders
  • 3. The Bar Is Rising: The Industry Keeps Getting Faster Days -360 -270 -180 -90 In Store 0 Today Yesterday 2-4 4-6 6-8 10-12 Next Generation Seasons/Year
  • 4. Leaders are Using Blended Process Models
    • What is different?
    • Operational differences per track
    • More product thru speed track
    • Potential for multiple sourcing tracks
    • Strategic, dedicated resources
    • Vendors dedicated to speed
    • Metrics monitored by track
    Standard In-Store Date Infusion Speed
    • Results
    • Stronger capabilities
    • 50% reduction in cycle times
    • Stronger execution and timeliness
    • More sustainable
    • Accountability
    • Greater profitability in speed tracks
  • 5. Leaders think in weeks not months Concept 2 weeks Sales 1 week Manufacturing 8 weeks Logistics 3 weeks
      • From 19 to 2 weeks
      • Concept boards as selling tools
      • Restructured color and fabric approvals
      • From 6 to 1 week
      • Sell virtually with boards and swatches
      • No sales samples
      • No changes to line during sales process
      • From 12 to 8 weeks
      • RM and mfg are done in same country
      • Source criteria is speed not margin
      • Approvals in the field for color
      • Inventory some raw materials (basics – denim, etc.)
      • 2 strike rule for vendors
      • From 9 to 3 weeks
      • 100% airship
      • Separate DC
      • 5 day turn in DC
    Liz-Quik (Liz Claiborne’s 14 week PD model)
      • Success Factors : Dedicated teams, decisions made without senior involvement, final decisions only made when they have to be, meet weekly to review trends and sales and make new decisions, upper mgt support, strict adherence to operating guidelines, clear roles, enhanced technology
    • Liz-Quik (Liz Claiborne’s 14 week PD model)
      • Moving to 14 weeks changed the way they design and sell in to retail
    Removes market week barriers to speed Creates accountability for success Eliminates useless tweaking of recommended assortments Source: Liz Claiborne speaking notes, AAFA Conference
  • 6. The benefits of speed can be significant Net Profit Margin (Pre-Tax Income / Revenues) Inventory Turns (COGS / 2 Yr. Avg. Inventory) Notes Source: 10-K, Hoovers, News Articles, Press Releases, and Earnings Conference Call Transcripts Inditex financials used for Zara. All financials represent FY 2004 (except Inditex financials are FY2003), with average income and inventory for FY 2003-2004 1 One year same-store comp H&M : “…a garment can move from design to hanger in just 20 days…” ”…every store is restocked daily…” Zara : “…design, produce, and deliver a new garment and put it on display in stores worldwide in a mere 15 days…” Chico’s : “…been able to sustain stellar sales growth because of its reputation for flowing in new merchandise…” “ Future” Supply Chain Cabela’s Coldwater Creek Talbot’s Dick’s Sporting Sears J. Crew Gap PacSun Limited Timberland H&M A&F Zara (Inditex) Chico’s Amer. Eagle 3.0x / 6% 5.3x / 6% 4.7x / 9% 3.6x / 8% 4.8x / 8% 5.9x / -10% 5.3x / 11% 4.2x / 13% 5.3x / 12% 5.8x / 15% 4.3x / 20% 5.1x / 19% 5.1x / 15% 5.5x / 21% 7.6x / 14% Company Turns / Net Margin Like-for-like sales 1 4.3 7.4% 5.3 5.5 17.8% 8.2% 0% n/a 2% 3% n/a 17% 0% 7% 4% 3% n/a 2% 9% 13% 21% Like-for-like sales (1 year) 2% 6% 11% TraditionalModel Sears : “…will introduce new apparel items and accessories in stores every 4-8 weeks, rather than at the start of each season…” Coldwater Creek : “… because inventory levels are cleaner and more current, we have also realized higher margins…” Talbot’s : “…want customers to know that if they see something they love, they should buy it now, because it may not be here in a few weeks…” “ Updated” Model Gap : “…new product flow strategies at each brand are helping drive traffic and regular-price selling, which has resulted in improved inventory turns…” Limited : “…the lean inventory position achieved has ensured maintenance of fresh stock…”
  • 7. PLM helps to achieve these benefits
      • PLM is a critical part of any product development effort aimed at achieving real and lasting benefits. However, you must extend PLM beyond PDM and
        • manage the entire process for speed
        • link with merchandise planning
        • integrate with supply chain partners
  • 8. The Benefits are Compelling
    • Companies can expect to see dramatic results; indeed we regularly see 5 year ROI models for PLM projects with IRR’s in excess of 100%. Common sources of “hard” benefits for can be found in:
      • Reduction of finished goods air freight to 10% to 20% of shipments, resulting in 1% to 3% reduction in COGS
      • Labor cost avoidance , as fewer new employees will be necessary to support added business due to streamlining of processes and elimination of clerical tasks. In fact we find that, on average, 30% of design and development labor is wasted on clerical and other redundant tasks related to lack of information.
      • Raw material aggregation across styles and even divisions, resulting in 3% to 5% reduction in materials costs
      • Shortened lead times causing a reduction in working capital and increased service levels.
  • 9. The Benefits are Compelling
    • There are additional benefits that are more difficult to quantify:
      • Developing product closer to market for more “fashion-right” assortment. We have seen clients measure anywhere from 1 to 3 points of additional maintained margin from product developed on their fast track programs.
      • Having a full collection / delivery arrive on time and together at retail, to maximize full price sell through
      • Disciplined handoffs , freeing people to focus on their job, not having to remain involved further along the process
      • Standardized systems , reducing support and infrastructure costs
      • “ Being on the same page”, with all parties, from design through sourcing, and including 3 rd party agents, raw material suppliers, and contract manufacturers, working from the same set of dates, the same understanding of the product line, and the same product specifications
      • Reduce SKU proliferation and over-development
  • 10. PLM easily replaces the functions of a “Spec Package”
      • Product Information – Style, colors, sizes
      • Sketches / Graphics
      • Construction Details, Measurement & Grading
      • Bill of Materials, Initial Costing
      • Version control & revision history
    Spec/PDM
      • Prior season styles, bodies/silhouettes, colors
      • Developed, tested, certified, and negotiated fabrics and trims and “where used” history
      • Lab Dip Tracking
      • Fabric Testing
      • Proto / Sample Tracking
      • Approval History
      • Product hierarchy
      • Top down assortment plan
      • Metrics and seasonal targets
      • Units, Price, Gross Margin / Intake Margin, Cost, Projected Sales
      • Style Adoption Status and Add/Drop tracking
      • Sourcing and QA tracking and definition
    Spec/PDM Concept Initiation & Development Design & Material Library Proto/Fit Iterations Spec/PDM Concept Initiation & Development Design & Material Library Sourcing & QA Line Planning Proto/Fit Iterations
  • 11. But many implementations stop far short of full workflow
      • Task definition and duration
      • Flexible, comprehensive task / product hierarchy relationship
      • Working schedule configuration by location
      • Multi-task predecessor / successor relationships
      • Task responsibility assignment by role
      • Automatic workflow template / product association
      • Lead time variations (e.g. Complexity, Geography)
      • Task status tracking
      • Workflow notifications and alerts
      • Development cycle status “dashboard”
    In order to be effective, this capability should:
      • Be completely integrated with the core “Spec”, Iteration, and Line Planning functionality
      • Provide an accurate, daily (or even hourly), prioritized “to do” list for each role in the organization
      • Drive the organization toward achieving key milestones (e.g. Retail Deliveries, Sales Shows)
      • Consider the seasonal and product hierarchies in defining tasks and inter-related schedules
    Simple, linear merchandise calendars by style do not address the need adequately. Detailed functionality includes:
  • 12. PLM Definition and Requirements Help Prioritize Needs A PLM Framework helps define requirements and set implementation priorities.
    • PLM can include many components:
    • Product Data
    • Libraries of information
    • Line planning and range optimization
    • Vendor partnerships and management
    • Workflow and process management
    • Collaboration
    Many companies start with a subset of the framework and add on as they meet with success. Spec/PDM Concept Initiation & Development Design & Material Library Sourcing & QA Line Planning Proto/Fit Iterations Workflow & Event Tracking Collaboration Collaboration Collaboration Collaboration Collaboration Spec/PDM Concept Initiation & Development Design & Material Library Sourcing & QA Line Planning Sample Iterations Workflow & Event Tracking Collaboration Collaboration Collaboration Collaboration Collaboration Collaboration
  • 13. Barriers to Speed Product development (concept to PO) typically makes up about 70% of the overall cycle from concept to shelf. If you’re going to reduce the overall cycle, starting with the product development cycle is imperative.
    • Typical barriers to speed in product development.
      • Delayed Decision Making
        • Poorly defined consumer & brand proposition, causing second guessing of designs
        • Lack of a properly structured & communicated merchandise or line plan to keep people working on the right products. No flow and delivery plans prioritizing decisions.
        • Low levels of employee – and partner – empowerment, causing management bottlenecks
      • Process Friction
        • Late or incomplete process handoffs
        • Designers that stay involved far too long
        • Re-keying of product data from system to spreadsheet and vice-versa
        • Aggregated decision points and overly generic processes and timelines
      • Lack of Management
        • Little information on the effectiveness and efficiency of the development process
        • No ability to manage by exception and proactively focus on problem resolution
        • Generally inadequate information on products and their status
  • 14. Integrated PLM eliminates Barriers to Speed
      • Delayed Decision Making
        • Poorly defined consumer & brand proposition, causing second guessing of designs
        • Lack of a properly structured & communicated merchandise or line plan to keep people working on the right products. No flow and delivery plans prioritizing decisions.
        • Low levels of employee – and partner – empowerment, causing management bottlenecks
      • Process Friction
        • Late or incomplete process handoffs
        • Designers that stay involved far too long
        • Re-keying of product data from system to spreadsheet and vice-versa
        • Aggregated decision points and overly generic processes and timelines
      • Lack of Management
        • Little information on the effectiveness and efficiency of the development process
        • No ability to manage by exception and proactively focus on problem resolution
        • Generally inadequate information on products and their status
    Concept Initiation & Development Concept Initiation & Development
  • 15. Integrated PLM eliminates Barriers to Speed
      • Delayed Decision Making
        • Poorly defined consumer & brand proposition, causing second guessing of designs
        • Lack of a properly structured & communicated merchandise or line plan to keep people working on the right products. No flow and delivery plans prioritizing decisions.
        • Low levels of employee – and partner – empowerment, causing management bottlenecks
      • Process Friction
        • Late or incomplete process handoffs
        • Designers that stay involved far too long
        • Re-keying of product data from system to spreadsheet and vice-versa
        • Aggregated decision points and overly generic processes and timelines
      • Lack of Management
        • Little information on the effectiveness and efficiency of the development process
        • No ability to manage by exception and proactively focus on problem resolution
        • Generally inadequate information on products and their status
    Concept Initiation & Development Line Planning Concept Initiation & Development Line Planning
  • 16. Integrated PLM eliminates Barriers to Speed
      • Delayed Decision Making
        • Poorly defined consumer & brand proposition, causing second guessing of designs
        • Lack of a properly structured & communicated merchandise or line plan to keep people working on the right products. No flow and delivery plans prioritizing decisions.
        • Low levels of employee – and partner – empowerment, causing management bottlenecks
      • Process Friction
        • Late or incomplete process handoffs
        • Designers that stay involved far too long
        • Re-keying of product data from system to spreadsheet and vice-versa
        • Aggregated decision points and overly generic processes and timelines
      • Lack of Management
        • Little information on the effectiveness and efficiency of the development process
        • No ability to manage by exception and proactively focus on problem resolution
        • Generally inadequate information on products and their status
    Concept Initiation & Development Design & Material Library Sourcing & QA Line Planning Collaboration Collaboration Collaboration Collaboration Collaboration Concept Initiation & Development Line Planning Collaboration Collaboration Collaboration Collaboration Collaboration Collaboration
  • 17. Integrated PLM eliminates Barriers to Speed
      • Delayed Decision Making
        • Poorly defined consumer & brand proposition, causing second guessing of designs
        • Lack of a properly structured & communicated merchandise or line plan to keep people working on the right products. No flow and delivery plans prioritizing decisions.
        • Low levels of employee – and partner – empowerment, causing management bottlenecks
      • Process Friction
        • Late or incomplete process handoffs
        • Designers that stay involved far too long
        • Re-keying of product data from system to spreadsheet and vice-versa
        • Aggregated decision points and overly generic processes and timelines
      • Lack of Management
        • Little information on the effectiveness and efficiency of the development process
        • No ability to manage by exception and proactively focus on problem resolution
        • Generally inadequate information on products and their status
    Concept Initiation & Development Line Planning Workflow & Event Tracking Collaboration Collaboration Collaboration Collaboration Collaboration Concept Initiation & Development Line Planning Workflow & Event Tracking Collaboration Collaboration Collaboration
  • 18. Integrated PLM eliminates Barriers to Speed Sample Iterations
      • Delayed Decision Making
        • Poorly defined consumer & brand proposition, causing second guessing of designs
        • Lack of a properly structured & communicated merchandise or line plan to keep people working on the right products. No flow and delivery plans prioritizing decisions.
        • Low levels of employee – and partner – empowerment, causing management bottlenecks
      • Process Friction
        • Late or incomplete process handoffs
        • Designers that stay involved far too long
        • Re-keying of product data from system to spreadsheet and vice-versa
        • Aggregated decision points and overly generic processes and timelines
      • Lack of Management
        • Little information on the effectiveness and efficiency of the development process
        • No ability to manage by exception and proactively focus on problem resolution
        • Generally inadequate information on products and their status
    Concept Initiation & Development Line Planning Workflow & Event Tracking Collaboration Collaboration Collaboration Collaboration Collaboration Concept Initiation & Development Line Planning Workflow & Event Tracking Collaboration Collaboration Collaboration Spec/PDM
  • 19. Integrated PLM eliminates Barriers to Speed
      • Delayed Decision Making
        • Poorly defined consumer & brand proposition, causing second guessing of designs
        • Lack of a properly structured & communicated merchandise or line plan to keep people working on the right products. No flow and delivery plans prioritizing decisions.
        • Low levels of employee – and partner – empowerment, causing management bottlenecks
      • Process Friction
        • Late or incomplete process handoffs
        • Designers that stay involved far too long
        • Re-keying of product data from system to spreadsheet and vice-versa
        • Aggregated decision points and overly generic processes and timelines
      • Lack of Management
        • Little information on the effectiveness and efficiency of the development process
        • No ability to manage by exception and proactively focus on problem resolution
        • Generally inadequate information on products and their status
  • 20. Integrated PLM eliminates Barriers to Speed
      • Delayed Decision Making
        • Poorly defined consumer & brand proposition, causing second guessing of designs
        • Lack of a properly structured & communicated merchandise or line plan to keep people working on the right products. No flow and delivery plans prioritizing decisions.
        • Low levels of employee – and partner – empowerment, causing management bottlenecks
      • Process Friction
        • Late or incomplete process handoffs
        • Designers that stay involved far too long
        • Re-keying of product data from system to spreadsheet and vice-versa
        • Aggregated decision points and overly generic processes and timelines
      • Lack of Management
        • Little information on the effectiveness and efficiency of the development process
        • No ability to manage by exception and proactively focus on problem resolution
        • Generally inadequate information on products and their status
  • 21. Integrated PLM eliminates Barriers to Speed
      • Delayed Decision Making
        • Poorly defined consumer & brand proposition, causing second guessing of designs
        • Lack of a properly structured & communicated merchandise or line plan to keep people working on the right products. No flow and delivery plans prioritizing decisions.
        • Low levels of employee – and partner – empowerment, causing management bottlenecks
      • Process Friction
        • Late or incomplete process handoffs
        • Designers that stay involved far too long
        • Re-keying of product data from system to spreadsheet and vice-versa
        • Aggregated decision points and overly generic processes and timelines
      • Lack of Management
        • Little information on the effectiveness and efficiency of the development process
        • No ability to manage by exception and proactively focus on problem resolution
        • Generally inadequate information on products and their status
  • 22. Does your System Coverage Look Like This? Collaboration Sample Iterations Collaboration Collaboration Line Planning Workflow & Event Tracking Collaboration Sourcing & QA Spec/PDM Concept Initiation & Development Collaboration Design & Material Library
  • 23. Software Vendors There are many vendors providing apparel and footwear-specific PLM solutions. The following is a list of vendors that KSA have most often appeared as part of client software selections over the past year.
      • Vendors that have always been apparel/footwear specific
        • Freeborders (not to be confused with AI / Karat)
        • GEAC Qwest Runtime
        • Gerber WebPDM (FLM)
        • Lectra
        • NGC
      • Vendors that have migrated from other industries to apparel/footwear
        • MatrixOne (now owned by Dassault)
        • PTC Flex PLM
        • UGS
      • Other smaller startups to be aware of:
        • MSC, Vertex, Yunique PLMon, zweave
  • 24. Key Factors for a Successful “Speed” Initiative
      • Define the product strategy . Are you a fast follower? A fashion leader? The low price option? All have a great impact on what your product development process should become.
      • Start with the Process . The process needs to be re-thought, not tweaked, in order to achieve quantum leaps in speed.
      • Align the Organization. Ensure that incentive systems, reporting relationships, and training are part of the implementation plan.
      • Implement a PLM System . The process integration and management required for success in today’s complex retail-apparel supply chain can only be accomplished with robust systems support.

×